Forex trading can be extremely exciting as there’s a lot of money to be made, but it’s also possible to lose a lot of money if you rush in or are extremely inexperienced. To help minimise these risks, I decided to make this article of the top 5 things you need to know before Vantage forex trading, to hopefully help you feel more prepared and level headed before getting started.
1. Know Yourself and Your Limits
Trading is about knowing the market which does take some time to figure out. But equally important is knowing yourself. How much are you prepared to invest and potentially lose. You’ll need to consider what your capital is, how secure your other investments are and how much you can really afford to say goodbye to if things go wrong. Getting to know yourself a little better can be really helpful for your trading. I personally like to do a ‘worst case scenario’ to figure out what’s the worst that could happen and how I would deal with it: it helps me get rid of most of my anxiety!
2. Have a Plan and Stick to It
Making money can be outright addictive, especially if you’re on a winning streak. It can be tempting to abandon your more conservative plan and be a little more ambitious with your trading than originally planned. It’s a good idea to stick to your plan: chances are you made it when you were feeling level headed and not emotional, so there’s probably some good logic tucked into it. Make a plan in advance and stick to it.
3. Start Small, Grow Organically
You’ll probably have to invest a decent amount to get started, but once you have, try to let your account grow organically, from returns from trades. If you can increase your account size by profits, that’s great, but if your account isn’t increasing there’s no sense in adding more and more funds into it. Let it grow by way of your hard work, that way if things don’t go as you planned you’re minimising your losses from the beginning.
4. Be Specific in the Beginning
When you’re starting out it can be tempting to choose a few different currencies, but chances are you’ll do much better if you focus on a currency pair until you better understand the market. Keep things as simple as possible and focusing from the beginning will allow you to get a better grip on the market, resulting in better profits and more income.
5. Be Patient
Sometimes things will take time and you have to be prepared to hold and wait until there’s a good opportunity for a trade. This can be frustrating for some, and downright impossible for others, so be mindful of your personality limits before you decide to move forward with forex trading.
Forex trading is a great hobby for some, an extra income source for many, and it’s becoming a way that many people now make their entire livelihood. How far you can take it will depend on your goals and skills, but if you’ve been thinking about it for a while, it could be a great time to get started.